Q: You wish to buy a $25,000 car. The
You wish to buy a $25,000 car. The dealer offers you a 4-year loan with a 9 percent APR. What are the monthly payments? How would the payment differ if you paid interest only? What would the conseque...
See AnswerQ: Assume that you contribute $200 per month to a retirement plan
Assume that you contribute $200 per month to a retirement plan for 20 years. Then you are able to increase the contribution to $300 per month for another 30 years. Given a 7 percent interest rate, wha...
See AnswerQ: You are looking to buy a car. You can afford $
You are looking to buy a car. You can afford $450 in monthly payments for four years. In addition to the loan, you can make a $1,000 down payment. If interest rates are 5% APR, what price of car can y...
See AnswerQ: You are looking to buy a car. You can afford $
You are looking to buy a car. You can afford $650 in monthly payments for five years. In addition to the loan, you can make a $750 down payment. If interest rates are 8% APR, what price of car can you...
See AnswerQ: A perpetuity pays $100 per year and interest rates are 7
A perpetuity pays $100 per year and interest rates are 7.5 percent. How much would its value change if interest rates increased to 9 percent? Did the value increase or decrease?
See AnswerQ: A perpetuity pays $50 per year and interest rates are 9
A perpetuity pays $50 per year and interest rates are 9 percent. How much would its value change if interest rates decreased to 7.5 percent? Did the value increase or decrease?
See AnswerQ: Payday loans are very short-term loans that charge very high
Payday loans are very short-term loans that charge very high interest rates. You can borrow $225 today and repay $300 in two weeks. What is the compounded annual rate implied by this 33.33 percent rat...
See AnswerQ: Payday loans are very short-term loans that charge very high
Payday loans are very short-term loans that charge very high interest rates. You can borrow $500 today and repay $590 in two weeks. What is the compounded annual rate implied by this 18 percent rat...
See AnswerQ: You would like to sell 200 shares of Xenith Bankshares (XBKS
You would like to sell 200 shares of Xenith Bankshares (XBKS). The current ask and bid quotes are $4.66 and $4.62, respectively. You place a limit sell-order at $4.65. If the trade executes, how much...
See AnswerQ: What’s the interest rate of a 6-year, annual $
What’s the interest rate of a 6-year, annual $5,000 annuity with present value of $20,000?
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